Study: The Impact of the COVID-19 Pandemic on Small Businesses

BizBuySell surveyed more than 3,000 small business owners and buyers to learn how the COVID-19 pandemic is impacting small business. Over the course of 41 questions, respondents weighed in on topics such as government mandated shutdowns, rehiring difficulty due to the $600 unemployment CARES Act stimulus, adjusting exit strategies, expansion plans, desired acquisitions and more.

Key findings are included below, while complete results can be found here:

Current Business Owners:

• Owners broadly impacted by pandemic, with 51% having to close or suspend some operations (83% for restaurants), and majority (59%) experiencing reduced customer demand
• 55% of owners with employees were forced to furlough or lay off workers, with 60% starting to rehire them, and of those 52% have had challenges rehiring due to the $600 CARES Act unemployment benefit
• 25% of owners gave employees the option to work from home, and of those 64% plan to offer that option post-pandemic
• 16% of owners plan to exit their businesses earlier and 20% plan to exit later due to the pandemic
• 18% of owners have seen increased demand during pandemic
• For those seeing reduced customer demand, 68% expect it to return to pre-pandemic levels within a year

Current Owners Looking to Buy:

• 34% of current business owners are looking to expand through new locations or products/services
• 55% of current owners feel the time is right to get a favorable price and good value, and 42% have started or accelerated plans to purchase (vs 24% who have delayed)
• 38% of current owners are trying to fast track a business purchase by Sept 27th to take advantage of 6 months of free principal interest on SBA loans, a CARES Act benefit. Of those, 35% would pay a premium to meet this deadline
• 61% of current business owners would consider purchasing a business that has been closed by the pandemic, and 80% would consider purchasing a business that has remained open but has been negatively impacted

Non-Owners Looking to Buy

• Similar to owners looking to buy, value shopping is driving behavior for this group
• 28% of respondents also indicated they are newly unemployed and seek more control of their future through business ownership. These buyers are researching business types and seek businesses that have been weathering the pandemic well
• Like Owner Buyers, this group is looking to take advantage of the CARES Act benefit of 6 months of P&I on new SBA loans closed by September 27th, would pay a premium to meet that deadline, and would consider purchasing a business negatively impacted by pandemic but that had remained open
• 32% of Non-Owner Buyers indicated they are searching online more for a business due to social distancing

Read the full results